EU approves ’partial negotiation mandate’ to create new funding mechanism for Ukraine
The ambassadors of the European Union member states have endorsed a partial negotiating mandate for a proposal to create a new single dedicated instrument to support Ukraine’s recovery, reconstruction and modernisation, while supporting its reform efforts as part of its EU accession path.
According to Censor.NET, citing Interfax-Ukraine, the decision was made on Wednesday in Brussels during a meeting of ambassadors, the press service of the European Council reports.
"Thus, the Ukraine Fund will consolidate the EU's budgetary support for Ukraine into one single instrument, providing consistent, predictable and flexible support to Ukraine for the period 2024-2027, adapted to the unprecedented challenges of supporting a country at war," the statement said.
The press release clarifies that the Council's partial negotiation mandate does not include budget-related issues, including the total size of the instrument and the share of grants and loans, which will depend on the final outcome of horizontal negotiations on the mid-term review of the framework of the multi-annual financial plan for 2021-2027.
Commenting on the decision, Vincent van Petegem, Minister of Finance of the Belgian EU Presidency, said: "The EU is committed to providing unwavering support to Ukraine for as long as it is needed. The Ukraine Fund aims to provide consistent support to Ukraine in rebuilding its country amidst the unprecedented challenges caused by Russia's aggressive war. At the same time, the support will help Ukraine to advance the reforms and modernisation efforts necessary to move it forward on its path to future EU membership."
The European Council outlined the main elements of the Council's partial position. Thus, the partial negotiating mandate retains the main components of the Commission's proposal. These include the objectives of the Fund and its structure in three areas.
The first component is the preparation of a "Ukraine Plan" by the Ukrainian government, which will set out the country's intentions for recovery, reconstruction and modernisation, as well as the reforms to be carried out as part of the EU accession process. Financial support in the form of grants and loans will be provided to Ukraine based on the implementation of the Ukraine Plan, which will be supported by a number of conditions and a payment schedule.
The second component is the provision of support by the European Union in the form of budgetary guarantees and a combination of grants and loans from public and private institutions within the framework of the investment programme for Ukraine. The Ukrainian guarantees will cover the risks associated with loans, guarantees, capital market instruments and other forms of financing that support the objectives of the Mechanism.
The last, third component is technical assistance and other support measures to help Ukraine comply with EU legislation and implement structural reforms on the path to future EU membership.
The European Council recalled that the European Commission had previously proposed a total budget of €50 billion for the Fund: EUR 17 billion in grants and EUR 33 billion in loans, which was not previously envisaged in the EU's long-term budget.
The press release also states that the approved position will serve as the Council's mandate in negotiations with the European Parliament. "Once an agreement is reached, the decision should be formally adopted by the Council and the European Parliament," the Council elaborated.
